Suno's Licensing Deals With UMG and Sony Have Stalled Over 'Walled Garden' Demands
Negotiations between Suno and Universal Music Group and Sony Music have stalled, with both labels demanding Suno adopt a closed 'walled garden' model that prevents users from freely downloading AI-generated songs. Suno has refused, citing the contrasting terms of its November 2025 Warner Music deal which allowed open downloads.
Original sourceSuno's path to full music industry legitimacy has hit a significant wall. While the AI music startup reached a licensing deal with Warner Music Group in late 2025, negotiations with Universal Music Group and Sony Music — the two largest rights holders in the world — have stalled over a fundamental business model disagreement, according to multiple sources familiar with the talks.
The sticking point: UMG and Sony are demanding that Suno adopt a "walled garden" approach, where AI-generated music can only be played within Suno's platform and cannot be freely downloaded or distributed externally. Suno has rejected this condition, calling it incompatible with its core product proposition. UMG's Chief Digital Officer confirmed the walled garden requirement was "a deciding factor" in why no deal has been reached.
The contrast with the Warner deal is stark. When WMG settled with Suno, users retained the ability to create songs and download them for personal and commercial use — terms that UMG and Sony have apparently refused to match. This suggests the major labels have decided on a divide-and-conquer strategy rather than a unified licensing framework, using the threat of ongoing litigation to extract structural concessions from Suno.
Suno simultaneously faces legal battles with European collecting societies GEMA and Koda, and a separate settlement process with Warner that continues to evolve. The AI music startup has been burning through goodwill that came with its early viral success, and each month without UMG and Sony deals represents continued legal and reputational exposure.
The broader industry implication is significant: if the two dominant labels succeed in forcing Suno into a walled garden, it sets a precedent that could reshape how all AI music tools are allowed to operate — not through legislation, but through licensing leverage.
Panel Takes
The Builder
Developer Perspective
“If UMG and Sony succeed here, every AI music tool will eventually face the same walled garden ultimatum. Developers building on top of Suno's API should treat this as a yellow flag — the product might look very different in 12 months.”
The Skeptic
Reality Check
“Suno is in a weak position. WMG's deal was generous because Warner wanted to get ahead of competitors — UMG and Sony have no such urgency. Without a resolution, the litigation threat alone constrains Suno's ability to raise, partner, or expand internationally.”
The Futurist
Big Picture
“The walled garden dispute is really about who controls the future of creative distribution. If AI music stays locked inside platform silos, the independent musician economy doesn't benefit — only the labels do. This negotiation matters for the entire creative economy.”